Are foreign loans cheaper + Is increasing taxes always desirable

Just two quick thoughts that have been in my head recently. First, one of the reasons touted by the finance minister for the attempt to switch to external debt is that it is cheaper. On the surface it does seem cheaper. Domestic bonds had yields of between 14 and 16 percent as at last week… Continue reading Are foreign loans cheaper + Is increasing taxes always desirable

On IPOB and destructive tactics

Quoting a book i’m currently reading: “In a way, [IPOB] is like a fly that tries to destroy a china shop. The fly is so small and weak. It cannot move even a single teacup. So how does a fly destroy a china shop? The fly finds a bull, gets into the ear of the… Continue reading On IPOB and destructive tactics

Currency shocks in the real world

The oil shock of 2014 wreaked havoc on the Nigerian economy, especially through its effect on the Naira. We all remember how the story went. Crude oil made up a significant portion of Nigeria’s exports. The crude oil price crashed, which meant Nigeria’s export revenue crashed, which put the currency under immense pressure. The policy… Continue reading Currency shocks in the real world

Naira currency misalignments from EQChange

The CEPII has a new database on equilibrium exchange rates for 180 countries since 1973. You can read more about their methods here. Such data is useful for examining currency misalignments, especially comparing it across countries. I poked around it a bit to see what the Nigerian story is. The interesting thing is the volatility, at… Continue reading Naira currency misalignments from EQChange